BLACKROCK FRONTIERS INVESTMENT TRUST
PLC (LEI: 5493003K5E043LHLO706)
All information is at 31 May
2019 and unaudited.
Performance at month end with net income reinvested.
|
One
month
% |
Three
months
% |
One
year
% |
Three
years
% |
Five
years
% |
Since
Launch*
% |
Sterling: |
|
|
|
|
|
|
Share price |
-4.7 |
-3.3 |
-11.3 |
32.1 |
32.6 |
74.6 |
Net asset value |
0.4 |
2.2 |
-5.5 |
37.7 |
34.6 |
83.0 |
Benchmark (NR)** |
-0.2 |
3.2 |
4.9 |
49.0 |
34.4 |
69.2 |
MSCI Frontiers Index
(NR) |
5.7 |
9.3 |
4.4 |
38.6 |
25.0 |
58.5 |
MSCI Emerging Markets
Index (NR) |
-4.1 |
0.8 |
-3.6 |
53.2 |
45.4 |
36.0 |
|
|
|
|
|
|
|
US Dollars: |
|
|
|
|
|
|
Share price |
-7.8 |
-8.4 |
-16.0 |
14.6 |
-0.1 |
41.8 |
Net asset value |
-2.9 |
-3.2 |
-10.5 |
19.3 |
1.4 |
48.4 |
Benchmark (NR)** |
-3.6 |
-2.2 |
-0.7 |
29.0 |
1.0 |
37.9 |
MSCI Frontiers Index
(NR) |
2.2 |
3.6 |
-1.1 |
20.0 |
-6.1 |
28.1 |
MSCI Emerging Markets
Index (NR) |
-7.3 |
-4.5 |
-8.7 |
32.6 |
9.3 |
9.9 |
Sources: BlackRock and Standard & Poor’s Micropal
* 17 December 2010.
** The Company’s benchmark changed from MSCI Frontier Markets Index
to MSCI Emerging ex Selected Countries + Frontier Markets + Saudi
Arabia Index (net total return, USD) effective 1/4/2018.
At month
end |
|
US Dollar |
|
Net asset value -
capital only: |
164.78c |
Net asset value - cum
income: |
171.58c |
Sterling: |
|
Net asset value -
capital only: |
130.73p |
Net asset value - cum
income: |
136.13p |
Share price: |
132.50p |
Total assets (including
income): |
£327.6m |
Discount to cum-income
NAV: |
2.7% |
Gearing: |
nil |
Gearing range (as a %
of gross assets): |
0-20% |
Net yield*: |
4.9% |
Ordinary shares in
issue: |
240,672,801 |
Ongoing charges**: |
1.4% |
Ongoing charges plus
taxation and performance fee: |
1.4% |
*The Company’s yield based on dividends announced in the last 12
months as at the date of the release of this announcement is 4.9%
and includes the 2018 final dividend of 4.40
cents per share and special dividend of 1.0 cents per share, both of which were declared
on 11 December 2018 and were paid to
shareholders on 7 February 2019. Also
included is the 2019 interim dividend of 3.00 cents per share announced on 30 May 2019 and due to be paid to shareholders on
28 June 2019.
**Calculated as a percentage of average net assets and using
expenses, excluding performance fees and interest costs for the
year ended 30 September 2018.
Sector
Analysis |
Gross
market value as a % of net assets |
|
Country
Analysis |
Gross
market
value as a % of
net assets |
|
|
|
|
|
Financials |
28.6 |
|
Indonesia |
14.5 |
Real Estate |
14.7 |
|
United Arab
Emirates |
9.2 |
Consumer Staples |
13.6 |
|
Vietnam |
8.8 |
Consumer
Discretionary |
12.4 |
|
Egypt |
8.8 |
Industrials |
8.7 |
|
Thailand |
8.6 |
Health Care |
8.3 |
|
Argentina |
7.7 |
Energy |
8.0 |
|
Malaysia |
6.6 |
Materials |
7.6 |
|
Kazakhstan |
5.6 |
Communication
Services |
6.0 |
|
Saudi Arabia |
4.7 |
Utilities |
1.9 |
|
Kuwait |
4.1 |
Information
Technology |
1.2 |
|
Nigeria |
3.9 |
|
----- |
|
Romania |
3.9 |
|
111.0 |
|
Philippines |
3.2 |
Short positions |
----- |
|
Greece |
2.9 |
|
-8.8 |
|
Pakistan |
2.8 |
|
===== |
|
Ukraine |
2.5 |
|
|
|
Poland |
2.4 |
|
|
|
Qatar |
2.3 |
|
|
|
PAN-Africa |
2.3 |
|
|
|
Kenya |
1.8 |
|
|
|
Turkey |
1.8 |
|
|
|
Hungary |
1.4 |
|
|
|
PAN-Asian |
0.7 |
|
|
|
Morocco |
0.5 |
|
|
|
|
----- |
|
|
|
Total |
111.0 |
|
|
|
|
----- |
|
|
|
Short positions |
-8.8 |
|
|
|
|
===== |
*reflects gross market exposure from contracts for difference
(CFDs).
Market Exposure
|
30.06
2018
% |
31.07
2018
% |
31.08
2018
% |
30.09
2018
% |
31.10
2018
% |
30.11
2018
% |
31.12
2018
% |
31.01
2019
% |
28.02
2019
% |
31.03
2019
% |
30.04
2019
% |
31.05
2019
% |
Long |
116.2 |
113.9 |
107.7 |
107.7 |
107.8 |
108.1 |
109.3 |
115.1 |
112.9 |
113.1 |
116.0 |
111.0 |
Short |
4.7 |
5.1 |
6.4 |
7.7 |
6.8 |
8.6 |
8.6 |
7.3 |
6.7 |
6.6 |
6.6 |
8.8 |
Gross |
120.9 |
119.0 |
114.1 |
115.4 |
114.6 |
116.7 |
117.9 |
122.4 |
119.6 |
119.7 |
122.6 |
119.8 |
Net |
111.5 |
108.8 |
101.3 |
100.0 |
101.0 |
99.5 |
100.7 |
107.8 |
106.2 |
106.5 |
109.4 |
102.2 |
Ten Largest Investments
Company |
Country of Risk |
Gross market
value
as a % of net assets |
|
|
|
Bank Mandiri |
Indonesia |
3.4 |
Banco Macro |
Argentina |
3.3 |
Astra International |
Indonesia |
3.2 |
National Medical Care |
Saudi Arabia |
3.2 |
Vincom Retail |
Vietnam |
3.1 |
LT Group |
Philippines |
3.0 |
Charoen Pokphand Food |
Thailand |
2.7 |
Emaar Development |
United Arab Emirates |
2.7 |
Eastern Tobacco |
Egypt |
2.6 |
MHP |
Ukraine |
2.5 |
Commenting on the markets, Sam
Vecht and Emily Fletcher,
representing the Investment Manager noted:
The Company’s NAV returned -2.9%1 versus its
benchmark, the MSCI Emerging ex Selected Countries + Frontier
Markets + Saudi Arabia Index (“Benchmark Index”), which was down by
3.6%2 in May. For reference, the MSCI Frontiers Index
was up by 2.2%2 and the MSCI Emerging Markets Index was
down by 7.3%2 on a US Dollar basis, over the same period
(all performance figures are on a US Dollar basis with net income
reinvested).
Our allocation to Argentina was
the largest contributor to returns in May as the market was up +14%
buoyed by its re-entry into the MSCI Emerging Markets Index.
Our holdings in financial, Banco Macro (+29%), Energy company, YPF
(+10%) and electric utility, Pampa Energia (+21%), all rallied
strongly. We have trimmed exposure on strong performance
while remaining positively positioned. We hold little exposure to
Saudi Arabia, which also helped
returns during the month. May saw the Saudi market entering
the MSCI Emerging Markets index for the first time, which saw the
market give back some of its strong year-to-date gains
(-9%). We continue to view the market as expensive on
both absolute and relative measures, as well as structurally
challenged. We note the very different reactions to the
upgrades which we believe were driven by the very different
valuation levels across the two markets. Additionally, Greek banks
continued their run of strong performance with National Bank of
Greece (+21%) and Alpha Bank (+22%).
Positioning in South-East Asian countries of Malaysia, Philippines and Indonesia were the top detractors from returns
in May, in addition to our holdings in Kazakhstan. Our
holding in British American Tobacco, Malaysia (-15%), hurt returns post the release
of weak first quarter earnings which showed a greater than expected
decline in volumes. In the
Philippines, conglomerate, LT Group, sold off (-7%) in spite
of solid earnings results on the back of potential tobacco tax
increases and investor concern around the funnelling of cash into a
rights issue at bank subsidiary, Philippines National Bank.
Indonesian cement company, Semen Indonesia, was an additional
detractor declining (-14%) after a weaker than expected earnings
result. Our position in Kazakhstan copper miner, Kaz Minerals (-24%),
also hurt returns as copper prices weakened.
We initiated a small position in Pakistan in May as the country signed a
US$6bn deal with the IMF
(International Monetary Fund), buying a position in private bank,
MCB. We await to see what measures the country will put in
place to tackle the challenges ahead including reducing fiscal
spending as well as liberalizing their currency and interest rate
regime but think that market valuations are already discounting
significant headwinds. We cut exposure in Malaysia by selling our position in Telekom
Malaysia as it neared our target price, taking advantage of a very
strong rally into month end (+25%) after the company reported much
better than expected results. Elsewhere, we took profits in
Vietnam and trimmed positions in
Argentina, Greece and Romania which have worked well. We
rotated the proceeds into our preferred names which have
underperformed.
We were in Argentina in May,
visiting companies and policymakers. Our view remains that the
economy should meet the conditions of its IMF package. It is
the political outlook which is more uncertain in our view given
Cristina Kirchner’s decision to run as Vice President with little
known Alberto Fernandez as the
Presidential candidate. Whilst we continue to track the political
developments closely, we believe that valuations are sufficiently
attractive to account for the risks.
We continue to find value in the smaller emerging and frontier
markets and see the markets well supported by the lower rate
environment. In aggregate the wide subset of countries that
make up our investible universe continue to exhibit strong GDP
(Gross Domestic Product) growth, have low government debt levels,
and represent an opportunity to invest in companies with strong
cash flow and high dividend yields, on some of the lowest
valuations in the world.
Sources:
1BlackRock as at 31 May
2019
2MSCI as at 31 May
2019
19 June 2019
ENDS
Latest information is available by typing
www.blackrock.co.uk/brfi on the internet, "BLRKINDEX" on Reuters,
"BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal). Neither
the contents of the Manager’s website nor the contents of any
website accessible from hyperlinks on BlackRock’s website (or any
other website) is incorporated into, or forms part of, this
announcement Kazakhstan